Question 2b
While negotiating to sell her pastry business to Sheree, Paula made a true statement, which gave
total figures and profits for the previous five years. This created an impression that the business
was in a healthy state. Paula did not disclose, nor did Sheree request a breakdown of figures,
which would reveal a steady decline in profitability over this period. Sheree having bought the
business discovered the true state of affairs.
Discuss the legal issues arising in this scenario and state what remedies, if any, does Sheree
have? [13marks]